The IASB is proposing changes in the accounting of defined pension plans as outlined in the chapter material. Using the reports of three Canadian companies in the telecommunications industry, determine the impact of these changes on the companies’ financial statements. Access the 2009 fiscal year-end reports for BCE Inc., Rogers Communications Inc., and TELUS.
Instructions
Using the financial statements for the three companies:
(a) Prepare a schedule that reports for each company:
1. The balance of the benefit asset/liability reported on the statement of financial position (be sure to identify the asset impact separately from the liability impact)
2. The funded status
3. The total of the unrecognized (unamortized) past service costs, net actuarial gains/losses, and transition balances at the balance sheet date
4. Total assets
5. Total liabilities
6. Total shareholders’ equity
(b) Calculate the current total debt-to equity ratio and the debt to total assets ratio for each of the three companies at the report date.
(c) Determine revised balances for the total liabilities and total shareholders’ equity, assuming the companies implement the proposals.
(d) Recalculate the total debt-to-equity ratios using the revised balances from part (c), and comment on your findings.
(e) What is the amount that is recorded as the pension cost? What would be the amounts under the new proposals for the service cost, interest cost, and the remeasurement costs to OCI (ignoring income taxes)?